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Event Description

On June 18, 2019, the Federal Trade Commission hosted a public workshop to assess the impact of certificates of public advantage (“COPAs”) on prices, quality, access, and innovation for healthcare services. This workshop is part of a broader COPA Assessment Project announced in November 2017.

COPAs are regulatory regimes adopted by state governments intended to displace competition among healthcare providers, and immunize mergers and collaborations from antitrust scrutiny. States are increasingly using COPAs to allow certain hospital mergers to proceed despite clear antitrust concerns, with the assumption that state regulatory oversight will mitigate the effects resulting from the elimination of competition and allow the hospitals to achieve certain efficiencies. The FTC is interested in developing a better understanding of the actual benefits and harms associated with COPAs, and the information obtained through this workshop may help advance the agency’s policy and enforcement strategies.

Academics, health policy experts, healthcare industry stakeholders, state regulators and law enforcers, and staff from the FTC’s Bureau of Economics discussed research regarding the effects of COPAs, as well as practical experiences with these regulatory regimes. A study of price and quality effects following Phoebe Putney’s acquisition of Palmyra Memorial Hospital, which involved an otherwise anticompetitive hospital merger that was consummated due to state regulations, was also presented.

Topics for discussion included the following:

  • General conclusions, if any, that may be drawn from existing research on the effects of COPAs, as well as suggestions for additional research that may be useful.
  • Observations and practical experiences with COPAs, including the resources and expertise required at the state level to implement and monitor these regulatory regimes.
  • The ability of competition versus regulation to generate optimal levels of price, quality, access, and innovation in healthcare markets.

To aid our analysis of these issues, the staff of the Federal Trade Commission sought public comment from interested parties. In particular, we invited comment on the following questions:

  1. What are the effects of COPAs in terms of price, cost, and quality of healthcare services; access to healthcare services; innovations in healthcare delivery models; or other dimensions of healthcare competition? How are these effects measured?
  2. How much time, and what commitment of resources and expertise, is required to implement and monitor the effectiveness of COPAs?
  3. What is the long-term viability of COPAs and likelihood that states will oversee COPAs in perpetuity?
  4. What is the impact to healthcare markets following the expiration or repeal of COPAs, when the state is no longer monitoring the behavior of the healthcare providers, and price and quality commitments are no longer in effect or enforceable?
  5. What is the public reaction to COPAs, and is this incorporated into state oversight?
  6. With respect to healthcare services, is competition more or less effective than regulation in lowering prices, costs, and expenditures; improving quality and access; promoting efficient resource allocation; and fostering innovation in delivery models?
  7. What relevant information, if any, can we learn about conduct remedies imposed by state law enforcers on certain healthcare provider mergers and collaborations (i.e., as part of a consent decree) that may inform our assessment of COPAs? Such remedies – including rate regulation, prohibitions on certain contracting practices, and commitments to return cost savings to the local community – are reminiscent of the types of regulatory commitments that states often require of COPA recipients. Are these situations similar enough for us to draw meaningful analogies?

FTC staff welcomes comment on these and related questions and issues. The process for submitting comments is explained below.

Attending the Workshop:

The workshop was free and open to the public.

Questions?

If you have a question about the workshop or public comment process, please email copaassessment@ftc.gov.

  • 9:00-9:05 am

    Welcome and Introductory Remarks

    Stephanie A. Wilkinson
    Attorney Advisor, Federal Trade Commission, Office of Policy Planning

    9:05-9:15 am

    Opening Address

    Joseph J. Simons
    Chairman, Federal Trade Commission

    9:15-9:35 am

    Historical Context for COPAs and Recent Resurgence in COPA Activity

    James F. Blumstein
    University Professor of Constitutional Law and Health Law & Policy
    Vanderbilt Law School, Director of Vanderbilt Health Policy Center

    9:35-11:05 am

    Retrospective Empirical Studies of COPAs

    Panelists will discuss empirical studies on the price effects of COPAs that were approved in the 1990s – including the Benefis Health COPA (Montana), Palmetto Health COPA (South Carolina), and Mission Health COPA (North Carolina) – as well as the quality effects of Phoebe Putney Health System’s acquisition of Palmyra Medical Center (Georgia).

    Presenters (in order of presentation):

    Christopher Garmon
    Assistant Professor of Health Administration
    Henry W. Bloch School of Management University of Missouri Kansas City

    Kishan Bhatt
    Graduate Fellow
    Federal Trade Commission
    Bureau of Economics

    Lien Tran
    Economist
    Federal Trade Commission
    Bureau of Economics

    Laura Kmitch
    Manager
    Bates White Economic Consulting
    Antitrust and Competition Practice

    Discussants:

    Leemore Dafny
    Bruce V. Rauner Professor of Business Administration
    Harvard Business School and Kennedy School of Government

    Gregory Vistnes
    Vice President
    Charles River Associates

    Moderator:

    Aileen Thompson
    Assistant Director, Federal Trade Commission, Bureau of Economics

    11:05-11:15 am

    Break

    11:15-12:45 pm

    Completed COPAs: Reviewing the Mission Health and Benefis Health COPAs

    Panelists will reflect on the regulatory oversight, price and non-price effects, behavioral incentives, and eventual repeal of the Mission Health COPA, effective in North Carolina from 1995 to 2016, and the Benefis Health COPA, effective in Montana from 1996 to 2007.

    Participants:

    Mark L. Callister
    Former Special Assistant Attorney General
    Montana Department of Justice

    Cory Capps
    Partner
    Bates White Economic Consulting

    Kendall Cotton
    Policy Advisor
    Office of the Montana State Auditor
    Commissioner of Securities & Insurance

    John Goodnow
    CEO
    Benefis Health System

    K.D. (Kip) Sturgis
    Special Deputy Attorney General
    North Carolina Department of Justice

    Moderator:

    Stephanie A. Wilkinson
    Attorney Advisor, Federal Trade Commission, Office of Policy Planning

    12:45-1:45 pm

    Lunch (on your own)

    1:45-3:15 pm

    Ballad Health COPA: Early Experiences and Observations

    Panelists will share early observations of the Ballad Health COPA, which became effective in January 2018, allowing the merger of Mountain States Health Alliance and Wellmont Health System to proceed in the geographic region along the border of northeast Tennessee and southwest Virginia.

    Participants:

    Erin C. Fuse Brown
    Associate Professor of Healthcare Law
    Georgia State University College of Law

    Richard G. Cowart
    Shareholder
    Baker Donelson

    Scott Fowler
    President and CEO
    Holston Medical Group

    Joseph Hilbert
    Deputy Commissioner for Governmental and Regulatory Affairs
    Virginia Department of Health

    Janet M. Kleinfelter
    Deputy Attorney General
    Public Interest Division
    Office of Tennessee Attorney General

    Daniel J. Pohlgeers
    Owner
    Sunesis Medical Consulting

    John B. Syer, Jr.
    Vice President East Region Networks
    Anthem Blue Cross and Blue Shield in Virginia

    Moderator:

    Goldie Veronica Walker

    Attorney, Federal Trade Commission, Bureau of Competition, Mergers IV Division

    3:15-3:25 pm

    Break

    3:25-4:55 pm

    Policy Considerations for COPAs: Competition, Wages, and Beyond

    Panelists will discuss topics to consider when evaluating a COPA regulatory approach, including: (1) concerns about local duplication of hospital services; (2) the impact of hospital mergers on employee wages; and (3) alternative state-based regulatory and enforcement approaches.

    Participants:

    Robert Berenson
    Fellow
    Urban Institute

    Robert Fromberg
    Senior Vice President
    Kaufman Hall & Associates, LLC

    Christopher Garmon
    Assistant Professor of Health Administration
    Henry W. Bloch School of Management
    University of Missouri Kansas City

    Thomas (Tim) Greaney
    Visiting Professor of Law
    UC Hastings College of Law
    San Francisco

    Elena Prager
    Assistant Professor
    Kellogg School of Management
    Northwestern University

    Thomas Stratmann
    Professor of Economics and Law
    George Mason University

    Tracy Wertz
    Chief Deputy Attorney General
    Antitrust Section
    Pennsylvania Office of the Attorney General

    Moderator:

    Katie Ambrogi

    Attorney Advisor, Federal Trade Commission, Office of Policy Planning

    4:55-5:00 pm

    Concluding Remarks

    Katie Ambrogi
    Attorney Advisor, Federal Trade Commission, Office of Policy Planning

  • Request for Comments

    The deadline for submitting public comments has been extended to August 2, 2019. Interested parties are invited to submit written comments on the topics described above to the FTC electronically or in paper form. FTC staff will consider these comments when developing the workshop agenda, and may use these comments in subsequent reports, statements, or policy papers, if any. If an entity has provided funding for research, analysis, or commentary that is included in a submitted public comment, please identify such funding and its source on the first page of the comment.



    If you prefer to submit comments in paper form, please refer to “COPA Assessment, Project No. P181200” both in the text and on theenvelope, and mail or deliver to the following address:Federal Trade Commission, Office of theSecretary, Room H-113 (Annex X), 600Pennsylvania Avenue, NW,Washington, DC 20580. Because paper mail addressed to the FTC is subject to delay due to heightened security screening, please consider submitting your comments in electronic form or by courier orovernight service, if possible.

FTC Privacy Policy

Under the Freedom of Information Act (“FOIA”) or other laws, we may be required to disclose to outside organizations the information you provide when you pre-register. The Commission will consider all timely and responsive public comments, whether filed in paper or electronic form, and as a matter of discretion, we make every effort to remove home contact information for individuals from the public comments before posting them on the FTC website.

The FTC Act and other laws we administer permit the collection of your pre-registration contact information and the comments you file to consider and use in this proceeding as appropriate. For additional information, including routine uses permitted by the Privacy Act, see the Commission’s comprehensive Privacy Policy.

This event is open to the public and may be photographed, videotaped, webcast, or otherwise recorded. By participating in this event, you are agreeing that your image — and anything you say or submit — may be posted indefinitely at ftc.gov or on one of the Commission's publicly available social media sites.